Question

Jennifer, Tony, and Becky are students in a history class. All three plan on selling their textbooks back at the end of the year. The bookstore will buy each textbook back for $95. Jennifer’s willingness to sell is $87. Tony wants to get at least $45 for his book, and Becky wants to sell her book back for $105. Place each student’s producer surplus in order, from highest to least.

Answer 1

Highest to Lowest Producer surplus :

For Tony = $95 - $45 = $50

For Jennifer = $95 - $87 = $8

For Becky = $95 - $105 = -$10

Step-by-step explanation:

Producer Surplus : The producer surplus shows a difference between buying price and willingness to sell price

In mathematically,

Producer surplus = Buying price - willingness to sell price

For Tony = $95 - $45 = $50

For Jennifer = $95 - $87 = $8

For Becky = $95 - $105 = -$10

The above categorization of product surplus shows a highest to least product surplus of each student.